Markets 
Published on
China is Europe’s primary source of strategic dependence.
Europe’s trade deficit with Beijing hit €359.9 billion last year, up 2.7 per cent from 2024. In 2025, EU imports from China totalled €559.4 billion, up 6.4 per cent from 2024, accounting for 22.3 per cent of all imports.
The EU relies on third countries for 204 products, 64 of which come from China, according to a 2024 Commission study. Currently, China supplies the bloc with 100 per cent of heavy rare earth elements, 98 per cent of solar panels, 54.4 per cent of machinery and vehicles, and 9.8 per cent of chemicals.
This dependence creates a strategic risk. China can affect prices, availability, and the resilience of sectors vital to Europe’s green transition and economic security, leaving the EU exposed to supply disruptions.
On 29 May, the Commission announced that it wants to rebalance its economic ties with Beijing as “the current state of the trade and investment relationship is not sustainable” anymore. By prioritising de-risking over decoupling, Brussels plans to reduce overreliance and address choke points where China has significant leverage.
Measures will primarily target the automotive, green tech, and machinery sectors and will include increasing production capacity, boosting stockpiles, and diversifying supply chains, especially for raw materials and clean-tech inputs.
The Critical Raw Materials Act, the Industrial Accelerator Act, the EU Chips Act, and the Net Zero Industry Act are among the EU’s main measures already targeting supply-chain vulnerabilities.
Reducing dependence will result in higher costs, slower scaling, and a lengthy transition before Europe can replace Chinese capacity.
Do you want to know how the EU has reduced its strategic vulnerability so far? Ask the Euronews AI chatbot!
Read the full article here
